How to Calculate my Interest Charges?

[Anonymous]

If I have a balance of $1069.49 and pay $600.49 leaving me with a new balance of $469.00, how do i calculate my interest charges for my next  statement. My APR is 24.74%.

[MarineVietVet]

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@Anonymous wrote:

If I have a balance of $1069.49 and pay $600.49 leaving me with a new balance of $469.00, how do i calculate my interest charges for my next  statement. My APR is 24.74%.

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You don't say what kind of card you have but here is how Cap 1 calculates interest charges. You can look on your statement to find how your issuer does it.

There are several calculations that are used to determine your total interest charge.

1. To get your Daily Balance: For each segment, 1) take the beginning balance and add in new transactions and the periodic interest charge on the previous day´s balance. 2) Subtract any payments and credits for that segment as of that day.

The result is the daily balance for each segment. However, if you paid your previous month´s balance in full (or if your balance was zero or a credit amount), new transactions which post to your purchase or special purchase segments are not added to the daily balances. Also, transactions that are subject to a grace period are not added to the daily balances.

2. To find your Average Daily Balance: 1) add the daily balances together and 2) divide the sum by the number of days in the billing cycle.

3. Estimate your Total Interest Charge: 1) multiply your average daily balance by the daily periodic rate and 2) multiply the result by the number of days in the billing period. NOTE: Due to rounding or a minimum interest charge, this calculation may vary from the interest charge actually assessed.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

h

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@Anonymous wrote:

If I have a balance of $1069.49 and pay $600.49 leaving me with a new balance of $469.00, how do i calculate my interest charges for my next  statement. My APR is 24.74%.

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If you want an approximate number and you are not adding charges to the balance so the balance stays the same.

Divde they APR by 12 to get monthly rate.    24% / 12 = 2%.    Mulitple by Balance  $470 x 0.02 = $9.40.     So between $9 and $10.

[Anonymous]

Its a Citizens Bank cc.

I looked at my statement and this is how they say to do it. Can someone explain using my figures?

Interest: We figure the periodic Interest for your Account separately for Purchases, Balance Transfers and Cash Advances (each a “feature”). For each feature of your Account we determine the Average Daily Balance of that feature of your Account and multiply that amount by the applicable daily periodic rate, then by the number of days in the billing cycle. We then add together the sums from each feature to determine the Periodic Interest on your Account for that billing cycle. We calculate the Average Daily Balance of each feature, adding any new transactions (including Account Fees and other charges) and subtracting any payments or credits. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total for each feature by the number of days in the billing cycle. This gives us the Average Daily Balance for each feature. This method results in the compounding of Interest and fees that are Interest.

[Anonymous]

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@Anonymous wrote:

Its a Citizens Bank cc.

I looked at my statement and this is how they say to do it. Can someone explain using my figures?

Interest: We figure the periodic Interest for your Account separately for Purchases, Balance Transfers and Cash Advances (each a “feature”). For each feature of your Account we determine the Average Daily Balance of that feature of your Account and multiply that amount by the applicable daily periodic rate, then by the number of days in the billing cycle. We then add together the sums from each feature to determine the Periodic Interest on your Account for that billing cycle. We calculate the Average Daily Balance of each feature, adding any new transactions (including Account Fees and other charges) and subtracting any payments or credits. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total for each feature by the number of days in the billing cycle. This gives us the Average Daily Balance for each feature. This method results in the compounding of Interest and fees that are Interest.

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An exact calculation would require exact numbers for all items mentioned.   

Is threre some part of this you do not understand?

[Anonymous]

Credit Limit: $1130.00

APR: 24.74%

Current Balance: $1069.49

Due Date: 2/13/2011

Paying: $600.49

Leaving Balance Before Interest: $469.00

Cycles 32 days

New Statement Created on 2/18/2011

Interest Charges for New Statement: ?

Next Due Date: 3/13/2011

New Balance: 469.00 + Interest Charge=?

Sorry, meant to post this info but got pulled away.

[Anonymous]

First you need average daily balance

27 days at 1069,  

5 days at 469.

Average Daily Balance =  (( 27 * 1069 ) + ( 5 * 469 ) )/ 32 days

AVD = 975.25

Daily Rate   = .2474 / 365 days  ( this is not exact, but close)

Daily Rate = .000678  

Interest =    Average Daily Balance *  Daily Rate * Number of Days

Interest  =    975.25 * .000678 * 32

Interest  =  21.16  

This should be very close. 

[Anonymous]

Wolf3, would you know which issuers apply payments above the minimum to the highest APR "features" first even before the new transactions in those feature categories show up on a statement? This makes a difference when revolving a promotional APR balance and deciding whether or not to make new purchases for bonus cash back. Being forced into paying interest on new purchases until the billing cycle closes (even if you overpay the minimum) is generally a dealbreaker, and it might help if we all knew who has what policy on this. Unfortunately, it looks to be CARD compliant either way, so the issuers can get away with the most favorable interpretation (to them).

TIA!

[Anonymous]

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@Anonymous wrote:

Wolf3, would you know which issuers apply payments above the minimum to the highest APR "features" first even before the new transactions in those feature categories show up on a statement? This makes a difference when revolving a promotional APR balance and deciding whether or not to make new purchases for bonus cash back. Being forced into paying interest on new purchases until the billing cycle closes (even if you overpay the minimum) is generally a dealbreaker, and it might help if we all knew who has what policy on this. Unfortunately, it looks to be CARD compliant either way, so the issuers can get away with the most favorable interpretation (to them).

TIA!

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MIxing of features is confusing.   The question is:  Does the the no-interest grace period apply to purchases each month while carrying a balance on the deferred or low interest feature.  I don't think the law specifies it, so it depends on the terms and conditions.  

In the past, we have bought appliances from Sears with DW SearsMC and my memory is there was no interest on purchases during that time. 

Here is the law on applying payments.

(b) APPLICATION OF PAYMENTS.—
‘‘(1) IN GENERAL.—Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

‘‘(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS.—A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment
amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

Wolf3, would you know which issuers apply payments above the minimum to the highest APR "features" first even before the new transactions in those feature categories show up on a statement? This makes a difference when revolving a promotional APR balance and deciding whether or not to make new purchases for bonus cash back. Being forced into paying interest on new purchases until the billing cycle closes (even if you overpay the minimum) is generally a dealbreaker, and it might help if we all knew who has what policy on this. Unfortunately, it looks to be CARD compliant either way, so the issuers can get away with the most favorable interpretation (to them).

TIA!

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MIxing of features is confusing.   The question is:  Does the the no-interest grace period apply to purchases each month while carrying a balance on the deferred or low interest feature.  I don't think the law specifies it, so it depends on the terms and conditions.  

In the past, we have bought appliances from Sears with DW SearsMC and my memory is there was no interest on purchases during that time. 

Here is the law on applying payments.

(b) APPLICATION OF PAYMENTS.—
‘‘(1) IN GENERAL.—Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

‘‘(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS.—A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment
amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

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Thanks. In my experience this goes beyond the CC issuer's T&C. Almost the only card I can carry a low APR balance on and pay off new purchases as soon as they post is Discover, and they have very clear T&C saying that there is no grace on purchases if you did not pay off the entire prior statement balance. Almost, because I have a few Blueprint eligible Chase cards, for which this would also work, just in a different way. I did not experiment with CITI cards, but maybe there is hope there from what you are saying.